Overview
- The Treasury announced on Aug. 19 that it would at least double its liquidity‑support buybacks for 10‑ to 30‑year Treasuries from $2 billion to at least $4 billion per operation and left open the possibility of larger purchases.
- The expanded program is scheduled to start in early September and run through the Nov. 4 quarterly refunding, but Treasury Secretary Scott Bessent has confirmed the department has not yet executed any purchases under the larger plan.
- Senior Treasury officials have told reporters they are considering using the roughly $940–950 billion Treasury General Account at the Federal Reserve to help fund escalated buybacks, which would temporarily avoid issuing offsetting short‑term bills.
- Major banks, prominent investors and market data show the initial yield drop after the Aug. 19 announcement largely reversed within days, and analysts say the scale of the operations is too small to change the broader supply‑and‑demand forces lifting long yields.
- Critics warn the tactic risks eroding Treasury market credibility and merely shifts the maturity mix rather than cutting the $40 trillion‑plus debt or primary deficits, with higher long yields feeding through to mortgage and corporate borrowing costs and the dollar.